Preferential Trade updates June 2023

Cambodia, Vietnam sign trade agreement

Cambodia and Vietnam have signed an agreement to promote bilateral trade for 2023-2024, noting that it is an important mechanism that will promote and enhance bilateral cooperation in all sectors. The June 2 online signing ceremony was witnessed by Minister of Commerce and Vietnam’s Minister of Industry and Trade. The function was attended by several leaders and specialist officials from the two ministries.

Canada backs Ukraine’s application to join trans-Pacific trade pact

Canada backs Ukraine’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Ukraine is seeking to join the 11-country trans-Pacific trade pact in an effort to boost trade and foreign direct investments. Kyiv says expansion of business ties is important in countering Russian aggression. Britain in March struck a deal to join the trade pact, which includes Australia and Japan.

EU extends trade benefits for Ukraine

The suspension of import duties, quotas and trade defence measures on Ukrainian exports to the European Union – known as the Autonomous Trade Measures (ATMs) – are in place for another year. This strong testament to the EU's unwavering support for Ukraine will help alleviate the difficult situation faced by Ukrainian producers and exporters because of Russia's unprovoked and unjustified military aggression.

The EU is phasing out by 15 September 2023 the exceptional and temporary preventive measures adopted on 2 May 2023 on imports of wheat, maize, rapeseed and sunflower seed from Ukraine under the exceptional safeguard of the Autonomous Trade Measures Regulation. The scope of these measures is further reduced from 17 to 6 tariff lines for the 4 products covered. These temporary and targeted measures were adopted due to logistical bottlenecks concerning these products in Bulgaria, Hungary, Poland, Romania and Slovakia, and on the condition that member states do not maintain any restrictive measures. The phase out will allow for significant improvements to be made to the Solidarity Lanes and to address challenges to get Ukrainian grain out of the country for this harvest.

EU - US Ministerial Trade and Labour Dialogue meeting discusses forced labour and the green transition

On 31 May 2023, the EU and the US held their second tripartite Trade and Labour Dialogue (TALD) with EU and US social partner stakeholders. The discussion focused on how to eradicate forced labour from EU and US supply chains and how to make the green transition a success for workers and businesses.

Commission Executive Vice-President and US Trade Representative met the TALD’s social partners in Luleå in Sweden as part of the Trade and Technology Council (TTC). They took forward discussions on eradicating forced labour from EU and US supply chains that they started at the last TTC in December. This is the first time that EU and US business and labour organisations have presented joint policy recommendations – based on input from the TALD’s stakeholders – showing the value of the TALD process. The EU and US will now further discuss how these recommendations can best be taken into account and how to ensure follow-up. TALD participants also began a discussion on how to make the green transition a success for workers and businesses. As the EU and US launch their work programme on the Transatlantic Initiative on Sustainable Trade (TIST) to address global environmental and climate challenges, the focus of the TALD on this is timely. Social partner stakeholders were invited to deepen their exchanges on this topic in the run-up to the next Ministerial TALD meeting. The EU and US established the TALD at their second TTC meeting on 16 May 2022 in order to consult their respective social partner stakeholders (on the EU side also referred to as 'social partners') on transatlantic trade and labour issues. They held their inaugural technical meeting in September 2022 and the first meeting at Ministerial level took place in December 2022.

EU moves forward with Critical Minerals Agreement negotiations with the US

The European Commission has adopted its negotiating directives for a Critical Minerals Agreement (CMA) with the United States. The objective is to foster EU-US supply chains in critical raw materials needed in the production of electric vehicle batteries. In 2022 alone, the EU exported €8.3 billion worth of critical raw materials relevant to this industry.  Concluding an EU-US CMA will ensure that as an ally, the EU is granted a status equivalent to US free trade agreement partners pursuant to the US Inflation Reduction Act. EU firms will then be able to compete on a level playing field with US and third country competitors on the US market, such as Chile, the Republic of Korea, and Japan. An EU-US CMA will also help boost EU production capacities in industrial sectors of strategic importance. Strong environmental and labour provisions will help ensure greater supply of sustainably sourced critical raw materials.

EU Commission releases its Report on Intellectual Property Rights in Third Countries

The European Commission published its biennial Report on the Protection and Enforcement of Intellectual Property Rights (IPR) in third countries. The Third Country Report identifies so-called ‘priority countries’ in which the state of IPR protection and enforcement is a source of major concern. Based on these findings, the Commission will focus its efforts and resources on the specific areas of concern in these countries, with the aim of improving IPR protection and enforcement worldwide. As this latest report shows, China remains the top priority country for the EU, while India and Türkiye remain priority 2 countries. Argentina, Brazil, Ecuador, Indonesia, Malaysia, Nigeria, Saudi Arabia and Thailand remain priority 3 countries.

Iran, Indonesia conclude negotiations on bilateral trade agreement

The Ministry of Trade of Indonesia has announced that Jakarta and Tehran have successfully completed the final stage of negotiations on a bilateral trade agreement. The two countries are set to sign the trade agreement during an upcoming visit to Jakarta by Iranian President. According to a statement from the Ministry of Trade of Indonesia, the agreement will be called the Indonesia-Iran Preferential Trade Agreement II-PTA. The signing ceremony took place during Iranian President visit to Jakarta on May 22-24.

Kenya and Singapore agree to implement trade, investment treaty

Kenya and Singapore have agreed to operationalize a treaty they signed five years ago to improve trade and investment between the two countries. The Bilateral Investment Treaty signed in 2018 sought to, among other things, remove double taxation on imported goods but the agreement is yet to come into effect due to a lack of clarity on how this should be done.

Peru and Indonesia agree to start negotiations towards trade agreement

The Peruvian Ministry of Foreign Trade and Tourism (Mincetur) has announced the conclusion of the terms of reference for the negotiation of a trade agreement between Peru and Indonesia. The announcement was issued after a meeting between Peruvian Foreign Trade-Tourism Minister and Indonesian Trade Minister within the framework of the 2023 Asia-Pacific Economic Cooperation’s (APEC) Ministers Responsible for Trade Meeting that takes place in Detroit, United States.

UAE signs bilateral trade deal with Cambodia

The UAE and Cambodia have signed a Comprehensive Economic Partnership Agreement (CEPA) agreement that is expected to more than double non-oil bilateral trade from $407m in 2022 to $1bn within five years. The bilateral trade deal with Cambodia, the UAE’s fifth since the launch of its trade strategy in 2021, will reduce or remove unnecessary trade barriers, facilitate investments, open market access to services exports, and create more opportunities for businesses to forge new partnerships.

US begins USMCA dispute against Mexico’s GM corn restrictions

U.S. Trade Representative announced that she is calling for dispute consultations with Mexico over the country’s efforts to ban genetically modified corn and its recent history of rejecting biotech seed traits. The dispute consultations are just the first step in the U.S.- Mexico-Canada Agreement’s dispute process. They can lead to a third-party dispute panel that effectively takes a decision on the argument out of both countries’ hands, but Tai expressed a desire to resolve the matter in consultations. The dispute consultations must run for 75 days before a dispute panel can be called for.

USTR Announcement Regarding U.S.-Taiwan Trade Initiative

United States Trade Representative has announced that the United States and Taiwan, under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office in the United States (TECRO), have concluded negotiations on the U.S.-Taiwan Initiative on 21st Century Trade.  

The first agreement under the initiative covers the areas of customs administration and trade facilitation, good regulatory practices, services domestic regulation, anticorruption, and small and medium-sized enterprises. Through these provisions, U.S. businesses will be able to bring more products to Taiwan and Taiwanese customers, while creating more transparent and streamlined regulatory procedures that can facilitate investment and economic opportunities in both markets, particularly for small- and medium-sized enterprises. Once signed, this agreement will deepen the trading partnership and enhance U.S.-Taiwan trade flows in order to promote innovation and inclusive economic growth for workers and businesses.